Handling Overtime and Site Allowances in Carpentry Payroll
Published on July 9, 2025
Are you an ACT-based carpenter or business owner struggling with payroll, from extra hours to site allowances? This guide helps employers manage wages for employees—including new employees—so every pay run is smooth, compliant, and free from payroll tax surprises. Clear processes mean you can focus on building instead of bookkeeping.
Why Clear Overtime Rules Matter
Setting clear overtime rules is essential for any business employing carpenters. When employees work beyond standard hours, you need to pay them correctly to keep your team happy and your business in good standing.
Under the Building and Construction General On-Site Award, carpenters work 8 hours a day or 38 hours a week. Any extra time counts as overtime, with the first two hours paid at 1.5 times the normal rate and additional hours at double time. For a Level 5 carpenter, a base pay rate of $49.95 per hour becomes $74.93 for the first two overtime hours and $99.90 after that. Employers who don’t follow these rules risk under-paying staff, lowering morale, and even facing payroll tax issues.
Need help calculating overtime rates for casual and full-time carpenters?
Schedule a complimentary consultation with us today to avoid costly payroll tax mistakes.
What Are Site Allowances?
Site allowances are extra payments to employees working on challenging or remote projects. These payments help compensate for difficult conditions and are calculated based on project size and site specifics.
A typical scale for site allowances is:
Project Value (A$ million) | Site Allowance (per hr) |
|---|---|
5 – 10 | $0.95 |
10 – 35 | $1.30 |
35 – 75 | $1.85 |
75 – 150 | $2.65 |
150+ | $3.70 |
On mid-sized ACT projects, site allowances usually range from $1.10 to $2.00 per hour. Always check your enterprise agreement or contract for the exact rate before adding it to your payroll account.
Integrating Overtime and Site Allowances in Payroll
Managing overtime and site allowances in your payroll system can seem complex, but with the right setup, it becomes straightforward. Automating these processes helps employers ensure every employee is paid accurately and on time.
Set up pay items in your payroll system:
Overtime (1.5×, 2×) tied to ordinary hours
Site allowances as separate allowance codes
Assign each employee’s classification so the right rate auto-populates.
On each timesheet, record:
Ordinary hours
Overtime hours (first two separately)
Hours eligible for site allowances
Run your Single Touch Payroll pay run and confirm:
Overtime multipliers apply correctly
Site allowance amounts match the project scale
Keep all data and records for at least seven years to meet tax and audit requirements.
Simplifying Payroll for Better Cash Flow
Streamlining your payroll processes is key to better cash flow and less stress for your business. Automating overtime and site allowance calculations in Xero, MYOB, or your chosen system helps employers save time, avoid errors, and ensure every employee is paid accurately.
With the right tools and support, you can reduce manual work, prevent under- or over-payments, and keep your team motivated. ACT Tax Group offers services to set up your payroll, manage wages, and support your business every step of the way—so you can focus on what matters most.
Lukasz Klekowski
